Project Management beyond critical chain scheduling (Journal Article Presentation)
Project management & critical chain
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Transcript of Project management & critical chain
On Project Management &The Critical Chain
Ziya G. Boyacigiller
This presentation was created and given by Ziya Boyacigiller who was leading Angel Investor and a loved mentor to many young entrepreneurs in Turkey. We have shared it on the web for everyone’s benefit. It is free to use but please cite Ziya Boyacigiller as the source when you use any part of this presentation. For more about Ziya Boyacigiller’s contributions to the start-up Ecosystem of Turkey, please go to www.ziyaboyacigiller.com
Copyright © Ziya G. Boyacigiller 2003,2004
On Project Management &The Critical Chain
Ziya G. Boyacigiller
Copyright © Ziya G. Boyacigiller 2003,2004
What can us from Succeeding
in Product Development?
1. Definition: Not working with key customer(s) on the α-version (prototype)
2. Planning: Not signing up to an Objective Specification (concurrent engineering).
3. Management: Not using Project Management with intensity end-to-end.
4. Quality: Not adopting and applying Dr. Deming’s (or Dr. Juran’s, etc.) principles.
Copyright © Ziya G. Boyacigiller 2003,2004
CCRITICAL-RITICAL-CCHAINHAINSCHEDULING & MANAGEMENT
TECHNIQUES
Eliyahu Goldratt, North River Press
Copyright © Ziya G. Boyacigiller 2003,2004
Q: Where do profits come from?
CUSTOMER PAYS COMPANY
COMPANY SHIPS PRODUCT TO CUSTOMER
COMPANY BUILDS PRODUCT
COMPANY SAMPLES, DESIGNS-IN, BOOKS PRODUCT
COMPANY INTRODUCES PRODUCT
COMPANY DEVELOPS PRODUCTS
COMPANY USES PROFITS TO START NEW PROJECTS
Copyright © Ziya G. Boyacigiller 2003,2004
If we can’t make a product shipment, we lose the profit for that shipment.
Whereas if we can’t introduce a product on time we lose much bigger:
“A six month delay in product introduction (TTM) reduces lifetime profits by 50%.”
“McKinsey & Co.”
sale
s
t im e
Copyright © Ziya G. Boyacigiller 2003,2004
Incomplete, Misfocused Designresults in cost, time overruns –
loss of profits and position
Copyright © Ziya G. Boyacigiller 2003,2004
Affect of TTM on Return on Development Time
ASP - 2-3x use monopoly pricing / maintain higher pricing longer
margin - 1-2x get a head-start in experience-curve, use higher-volume
volume - 2-3x get to see more quotes / get to win more designs
lifetime - 1-2x get a head start / get into better quality projects
DEMM - 1-3x use same or more resources
RODT - 4-12x get a better payback
Copyright © Ziya G. Boyacigiller 2003,2004
fast cycle-time => TTM => higher profits
020406080
100120
years
reve
nu
e
fast (1 yr cycle) slow (2 yr cycle)
Copyright © Ziya G. Boyacigiller 2003,2004
ALL SCHEDULES START NEAT AT THE BEGINNING...
EXPECTED FINISH DATE"M I L E S T O N E"
AB
CD
Copyright © Ziya G. Boyacigiller 2003,2004
Pareto of Typical Delays
0
2
4
6
8
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12
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16
18
20F
req
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cy o
f O
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(wks
)
CO
NF
LIC
T
ES
TIM
AT
ION
RE
SO
UR
CE
/PO
TE
CH
NIC
AL
TE
CH
NIC
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CO
OR
DIN
AT
ION
DE
FIN
ITIO
N
TE
CH
NIC
AL
TE
CH
NIC
AL
RE
QU
IRE
ME
NT
VE
ND
OR
AC
TS
OF
GO
D
VA
CA
TIO
N
DO
NW
TIM
E
PE
RS
ON
NE
L
MA
NA
GE
ME
NT
HU
MA
N E
RR
S
TE
CH
NIC
AL
DO
CU
ME
NT
AT
ION
QA
/SH
IP
Copyright © Ziya G. Boyacigiller 2003,2004
UNCERTAINITY IS WHY WE NEED PROJECT MANAGEMENT
TIME TO COMPLETION
PR
OB
AB
ILIT
Y O
F O
N-T
IME
CO
MP
LE
TIO
N
ME
DIA
N
1 X >1 X
Copyright © Ziya G. Boyacigiller 2003,2004
ParkinsonParkinson’’s Laws Law
“Work expands to fill (and evenand even exceed exceed ) the time available.”
Copyright © Ziya G. Boyacigiller 2003,2004
Pareto of Historic Delays
0
5
10
15
20
25
30
35
40
45%
of
1800
WW
MU
RP
HY
PA
RK
INS
ON
S
MU
LTI-
TAS
KIN
G
SU
BO
RD
INA
TIO
N
OT
HE
R
Copyright © Ziya G. Boyacigiller 2003,2004
Q : What does “Manage Well” reallyreally mean?
Faster project development times Meet schedule datesMeet milestone dateMaximize engineering productivityMinimize costsMinimize reworkDo not keep resources idle . . .
Copyright © Ziya G. Boyacigiller 2003,2004
SACRIFICE LOCAL OBJECTIVES, FOCUS ON THE GLOBAL OBJECTIVE
C15
D90
B30 E
30
LATE START(SAVE COST / REW ORK)
C15
D90
A90
B30 E
30
EARLY START(PROTECT CRITICAL-PATH)
Copyright © Ziya G. Boyacigiller 2003,2004
SUBORDINATE ALL OTHER OBJECTIVES TO PROTECT THE
CRITICAL-CHAIN
MANAGE W ELL
CONTROLCOSTS
PROTECTTHROUGHPUT
EARLY START
LATE START
GOOD LOCAL PERFORMANCE
GOOD GLOBAL PERFORMANCE
Copyright © Ziya G. Boyacigiller 2003,2004
SCHEDULES AREMISSED
MEET SCHEDULES
PRODUCTIVITYTOO LOW
IMPROVEPRODUCTIVITY
SCHEDULE LESS SLACK TIME FOR UNCERTAINITIES
SCHEDULE MORE SLACK TIME FOR UNCERTAINITIES
.... need to decide what is more important to make us win...
Copyright © Ziya G. Boyacigiller 2003,2004
“SAFETY” BUILT INTO ESTIMATES, EXTENDS TASK SCHEDULES BY 2X
TIME TO COMPLETION
"AGGRESIVE ESTIMATE"W ITH MINIMUM SAFETY
50% CONFIDENCE
"SAFE ESTIMATE"80-90% CONFIDENCE
SAFETY
PR
OB
AB
ILIT
Y O
F O
N-T
IME
CO
MP
LE
TIO
N
ME
DIA
N
1 X >1 X
Copyright © Ziya G. Boyacigiller 2003,2004
BELIEF: The only way to meet the schedule is through protecting each step... Pad every step with safety.
TIME
SA
FE
TY
A
SA
FE
TY
B
SA
FE
TY
C
SA
FE
TY
D
Copyright © Ziya G. Boyacigiller 2003,2004
SAFETY IS INSERTED INTO PROJECTS IN 3 WAYS
TIME ESTIMATES BASED ON PESSIMISTIC EXPERIENCES
EVERY LEVEL MANAGER ADDS ONE ADDITIONAL SAFETY
ESTIMATOR SANDBAGS AGAINST “CUTS”
Q : If estimates have so much safety why do projects finish
late?
Copyright © Ziya G. Boyacigiller 2003,2004
Only 50% of projects meet Original Schedule Date (OSD)
Over 90% of products introduce the last week of the quarter
Q : If estimates have so much safety why do projects
finish late?
Copyright © Ziya G. Boyacigiller 2003,2004
PARKINSON’S LAW KICKS IN...
EX
PE
CTE
D F
INIS
H
DELAYEDSTART
"URGENT"STUFF
Student Syndrome Multi-Tasking Accumulating Delays Interruptions Distractions
Copyright © Ziya G. Boyacigiller 2003,2004
PARKINSON + MURPHY = DELAY
EXPECTED FINISHM I L E S T O N E DATE
AB
CD
Copyright © Ziya G. Boyacigiller 2003,2004
Q : How come we allow multi-tasking?
A10
B10
C10
NO MULTI-TASKING
A5
B5
C5
A5
B5
C5
20+d
MULTI-TASKING
20+d
20+d
PLUS if A is delayed by “d”, domino-effect kicks in and delays all projects by “d”.
Copyright © Ziya G. Boyacigiller 2003,2004
AVOID MULTI-TASKING
Use free-time (waiting time) to help other projects
Select resources with low loading-factor
Use resource buffers to eliminate domino-effect
Coordinate resources through advanced reminders
Copyright © Ziya G. Boyacigiller 2003,2004
DELAYS ACCUMULATE,GAINS DON’T...
EXPECTED FINISHM I L E S T O N E DATE
ACTUAL FINISHDATE
AB
CD
Copyright © Ziya G. Boyacigiller 2003,2004
PROTECT THE CRITICAL-PATH WITH A PROJECT BUFFER...
TIME
SL
AC
K A
SL
AC
K B
SL
AC
K C
SL
AC
K D
PROJECT BUFFER
Copyright © Ziya G. Boyacigiller 2003,2004
ATTACK THE HIGHEST UNCERTAINTY TASKS FIRST...
TIME
SL
AC
K A
SL
AC
K B
SL
AC
K C
SL
AC
K D
PROJECT BUFFER
C
A
B
D
Copyright © Ziya G. Boyacigiller 2003,2004
Buffer Simplifies Priorities, Provides Focus and Early Warnings
For Managers
OK W ATCH /PLAN ACT
SAFETY BUFFER
Copyright © Ziya G. Boyacigiller 2003,2004
FEEDING-BUFFERS PROTECT THE CRITICAL-CHAIN, AND PREVENT
CRITICAL-PATH FROM CHANGING DURING PROJECT
FEEDING-BRANCHES&
FEEDING-BUFFERS
Copyright © Ziya G. Boyacigiller 2003,2004
MANAGING THE SCHEDULE :MANAGING THE SCHEDULE :
Eliminate MilestonesForce On-time/early Starts Manage To Meet The Aggresive
DurationsManage Murphy’s DelaysRESULT:RESULT:
Gain The Times When Tasks Are Finished Early & Minimize Parkinson’s
Delays
Copyright © Ziya G. Boyacigiller 2003,2004
Critical-Chain Technique Saves Resources and Cuts TTM
Half the tasks will be finished on time or early (gains accumulate).
This will offset the other half done late. Statistically, a project will need less than
1/2 of the safety (project buffer)
Therefore, on the average projects will pull in by over 25%
Copyright © Ziya G. Boyacigiller 2003,2004
Less-is-More! Make TTM Make TTM firstfirst priority. priority.
MISSING TTM,PRODUCTIVITY
IS LOW
MEET TTM,PRODUCTIVITY
IS HIGHER
PRODUCTIVITYTOO LOW
MISS TTM,PRODUCTIVITYIS STILL LOW
START MORE PROJECTS(ONE ENGINEER PER PROJECT)
START LESS PROJECTS(MULTIPLE ENGINEERS PER
PROJECT)
versus
Copyright © Ziya G. Boyacigiller 2003,2004
We need a paradigm shift for TTM...We need a paradigm shift for TTM...
TTM means focused product plansfocused product plans (less-is-more)
TTM means simplicity simplicity (straight-line to target)
TTM means focus on futurefocus on future (duck-hunting)
TTM means commitment to win commitment to win (doing vs winning)
TTM means taking risks taking risks (risk failure now - win later)
Copyright © Ziya G. Boyacigiller 2003,2004
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
PR
E-M
FH
MF
H
PD
IOS
DE
S
LA
Y
FA
B
TE
ST
INT
RO
MANAGEMENT INFLUENCE MANAGEMENT ATTENTION
Management Influence is Lowest Towards the End of a Project
Front-End Roles Back-End Roles
Copyright © Ziya G. Boyacigiller 2003,2004
MANAGEMENT ROLESMANAGEMENT ROLES
FRONT-END Define business strategies Define product direction Define process direction Manage aggregate project &
resource portfolios (build - match)
Own and operate product development process
Launch projects & teams Obtain firm commitmentsObtain firm commitments
BACK-END Review commitmentsReview commitments Review projects & plans Provide resources Assure support from functional
organizations Manage changes & conflicts Fix systematic problems Teach, train, indoctrinate Improve product development
process
Copyright © Ziya G. Boyacigiller 2003,2004
Make Commitment to Win Commitment to Win Highest Priority
CEOCEO buys into project - commits to support resource requirements fully & on-time
Senior Managers Senior Managers buy into project - commit to provide service and support fully & on-provide service and support fully & on-timetime
Project Team Project Team signs-up to win - commit to meet TTM and other goals - with no excuses
Copyright © Ziya G. Boyacigiller 2003,2004
Manage Project ConflictManage Project Conflict Commit to meet TTM for all projects when planning OSPCommit to meet TTM for all projects when planning OSP Eliminate uncertainty - achieve first pass success Anticipate potential problems, and schedule into successor
project a “reasonable” time to resolve them Have additional resources available to add to predecessor
project if problem is beyond reasonable / free up engineer altogether (takes consulting role) if possible
Double-up engineers on successor project to have at least one available all the time (trade the other engineer if problem is beyond reasonable)
Add resources to successor project to make up the lost time
Copyright © Ziya G. Boyacigiller 2003,2004
Manage Estimation ErrorsManage Estimation Errors
Break project into tasks and determine “without-problems” & “with-problems” time estimates
Allow “sufficient” slack time in addition to the cumulative without-problems time
CommitCommit to meet this schedule Publish project bonus amounts when schedule is signed Review schedule performance weekly, and actively
coach / manage Eliminate rework by using systems approach to design,
and doing cell/block level objective (before design) and design (after design) reviews
Dictate cell / block reuse Compile task time actuals to use in future estimates